By Dawn Kopecki and Christopher Stern, March 31, 2008
(Bloomberg) -- U.S. Housing and Urban Development Secretary Alphonso Jackson quit following calls by lawmakers for him to step down amid a federal criminal probe into contracts the agency awarded.
"There comes a time when one must attend more diligently to personal and family matters,'' Jackson, reading from a statement, told reporters in Washington today. "Now is such a time for me.'' His resignation takes effect April 18.
His departure, without an immediate replacement, comes as the Bush administration is working on measures to ease the housing crisis. Jackson was an advocate for an industry-led program to encourage lenders to voluntarily refinance troubled loans rather than using federal funds to tackle the mortgage crisis.
Jackson came under fire in the U.S. Senate after refusing to answer questions about accusations he improperly directed his staff to steer federal housing contracts to political allies. Senate Banking Committee Chairman Chris Dodd asked for the housing secretary's resignation earlier this month, calling Jackson "unfit'' to run the agency during a national housing crisis.
Dodd made the statement in a March 21 letter to President George W. Bush that was also signed by Senator Patty Murray, a Washington Democrat.
The Justice Department is investigating whether Jackson was truthful when he told the agency's inspector general and Congress that he didn't direct federal housing contracts to friends, a person familiar with the probe said. The National Journal has reported that the case includes Jackson's ties to a golfing partner who received more than $485,000 to manage construction work in New Orleans after Hurricane Katrina in 2005.
'Real Solutions'
"I hope this change in personnel will be matched by a change in policy that brings real solutions to the housing crisis that has triggered this economic recession,'' Dodd said in an e- mailed statement today.
Democrats in Congress have criticized the Bush administration for not going far enough in stemming foreclosures, which reached record levels in the fourth quarter of 2007. The administration has resisted calls for greater government intervention, instead promoting a voluntary industry-led effort called the Hope Now Alliance, created to help modify loans for struggling borrowers.
Dodd, along with House Financial Services Chairman Barney Frank, a Massachusetts Democrat, proposed earlier this month that HUD's Federal Housing Administration insure mortgages if lenders reduce the loan's principal to make payments more affordable for homeowners.
Bush Accepts Resignation
Jackson didn't take any questions and made no mention of the congressional demands that he step down. DJ Nordquist, a HUD spokeswoman, wouldn't comment when asked about the reasons for Jackson's resignation.
A former Dallas housing official, Jackson led the Bush administration's push to scale back federal funding of large urban public housing projects in favor of mixed-income developments and homeowner education. Jackson, who was appointed to the job in 2001, was the main architect behind FHA Secure, which opened up more federal financing for subprime borrowers.
Bush, in a statement, said he accepted Jackson's resignation "with regret.''
Democratic presidential candidate Hillary Clinton issued a statement today saying that Jackson's resignation is ``appropriate,'' yet ``does nothing to address the Bush administration's wait-and-don't-see posture to our nation's housing crisis.''
Clinton's Democratic rival Barack Obama said Jackson's resignation amid "a housing crisis and charges of cronyism serves as a stark reminder of what's at stake in this election.''
Republican presidential candidate John McCain said he didn't have any comment on Jackson's resignation.
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net; Christopher Stern in Washington at Cstern3@bloomberg.net.